Advanced Micro Devices (NASDAQ:AMD) shares fell as much as 8% in Wednesday trading after the chipmaker’s first-quarter revenue outlook failed to match the lofty expectations set by the AI-driven rally of late 2025.
While the Santa Clara, California-based company reported record fourth-quarter results—posting revenue of $10.27 billion and adjusted earnings of $1.53 per share, both beating Wall Street consensus—investors focused on the sequential slowdown.
AMD projects first-quarter 2026 revenue of approximately $9.8 billion, a decline from the holiday quarter that sparked fresh concerns over the company’s ability to gain meaningful ground against dominant market leader Nvidia.
The softer guidance is partly attributed to a sharp sequential drop in AI chip sales to China due to tightening export restrictions.
AMD recorded $390 million in Instinct MI308 sales to the region in the fourth quarter but expects that figure to plummet to just $100 million in the current period.
Additionally, the company is navigating a "significant double-digit" decline in its gaming console business as the current generation of PlayStation and Xbox hardware enters its later years.